COMMON SENSE

The globex rally last night took us right to the 20 EMA on the daily chart. First time we've touched the 20 EMA since October 1st. Only reason I care about this is that is graphically represents change in the supply/demand for oil on the higher timeframe. Buyers are beginning to get stronger, sellers are still in control but their grip may be weakening.

These are early signs - we'll have to wait for the weekly chart to pullback to the low 80's and then perhaps a retest of the mid-70's before really declaring this bear trend over.

This area does make sense as a place for big traders to take some profits and for long term longs to step in. Looking at the weekly chart we are at the bottom of a multi-year range.

Combined with the contract going back into contango, I am open to the possibility that we will see a bounce over the next 1-3 weeks and a possible reversal on the weekly chart over the next month or so.

daily:

Weekly:

Of course, this is all just conjecture. It is way too early to tell if any kind of reversal is happening. But its good to be aware of what is possible on the higher timeframes while we place good trades on the timeframe we are trading.

Cover most 76.50 area and still hloding shorts. No longs for me till FLUSH down shows up. Picking longs within macro bearsih trend set up BAR is very high. CL can drop another 100 ticks in a NY minute and if she gets stuck in a box- get your scalps from long side and RUN. Serious buying or monetum is tough to hide, for example during Euro session this morning. Till then it's just guessing based upon 2 candles up and one down etc.

Added to shorts 76.40 area and there she goes. Anyone who got too comfortable with his longs during euro session with some pie in the sky bullish bias- is STUNNED. Feels like this is the flush down to this morning CRIME SCENE to try long. Still waiting for evidence to try long, otherwise holding some shorts. OPEC output cuts announcement in the upcoming meeting plus as shared by Surly CL cantago can put a fire under CL to the upside.

My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.

Pixabay via Google Images
Lower oil prices (a 5% - 15% deflation) will linger and provide a boost for consumers' disposable income. But this may be a headwind for energy stocks, and commodities like copper and aluminum that use oil in their production.

"The disinflationary impulse from lower commodity prices sweeping across the world is likely to be manifested first in lower headline inflation rates," the analysts explained. "But, by boosting disposable income, there is also likely to be a positive impact on GDP growth in EM and DM oil importers that should become visible as the year progresses."

Source: Goldman Sachs

How i plan to use it: All it means whenever catalyst for price spikes cools off- short with confidence. Try to differentiate between real buying vs price spikes to lure traders in before pulling the rug- which is the most common tactics of traders with deep pockets and macro perspective.

My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.

Gold, Euro, Japenese Yen and Aussie $- mostly shortable into bounces as 2014 catalyst are poised to hold into 2015.

Per GS 2015 game plan.

" Labor market slack, evidenced by low wage inflation, will persist, and disinflation risks will force other central banks to act, as core inflation remains below their targets.
"We think the response to that kind of risk, where it emerges, is likely to be a powerful force in markets," the analysts wrote.

"The ECB is already moving along its path towards credit easing. And while we see the ECB as more reluctant to embrace sovereign QE in our central case, we think a clearer shift towards a more negative scenario would ultimately trigger a more aggressive QE program than the market expects."

"The dollar will remain strong versus its G10 peers and most emerging markets, with EUR/$ at 1.15 and $/JPY at 130 by the end of 2015.

"Within that view, continued declines in the EUR/$ rate are the single most important element, but we expect further meaningful weakness in the JPY as well," the analysts wrote.

My posts are not meant to give financial advice neither do they imply that my method is special. "THIS IS WHAT I COULD BE IF I HAD A TOTALLY CARE FREE STATE OF MIND DURING TRADING" Mark Douglas.